Houston Economic Trends in 2013 Look Great

Houston Economic Trends (Economy getting hotter in Houston)

Houston's economy is leading Texas and strong economic growth is evident

Special Report from GLOBAL PERSPECTIVES

Houston economic trends have emerged in the past two years, to an accelerated pace of new economic energy. Global Perspectives in 2010 wrote: “A definition of dead is a Houston Banker”.

In 2013, the Houston economy and it’s community bankers have risen from the dead. One goodexample includes the SBA Houston District which reported that the Houston District posted 242 loans of more than $129,000,000 to small businesses in the Houston area during the first quarter of the fiscal year. SBA made 12,900 loans for more than $5 billion nationally and Houston is getting its share of that money.

Houston District Top 10 SBA Lenders

Wells Fargo Bank

BBVA

Compass

Wallis State Bank

Amegy Bank

JP Morgan

Chase Bank

Integrity Bank

Spirit of Texas Bank

First Intercontinental

BankMembers

Choice Credit Union

Mid-South Bank

Houston District Top 3 Certified Development Companies

Capital CDC

North Texas CDC

Community CDC

Houston’s banking environment has evolved, as local community bankers finally understand their fiduciary responsibility to community and are lending again. Allegiance Bank increased its commercial and industrial loans by 60% in the past year while it hired more lending officers.By contrast, Texas Coastal Bank in Pasadena indicated that they had increased loans about 25% according to Chris Doyle. Green Bank increased its C&I loans by 77% over the past year and indicated that the high price of oil and improving job market were important indicators to them. He said: "We know 70% per year is hard to sustain, but hope for continued loan growth of 30% per year."

Houston leads Texas in positive economic growth. Kafill Sadiqui, a former banker and now investment manager for many wealthy Houstonians is seeing more new deals in 2013, than he has seen in 4 years. “The economy is back for many, and coming back for many more. We are seeing dynamic new multimillion dollar projects almost daily, and yes, banks are getting back into the game.”

Job growth in Houston leads the state and has outperformed the nation

Global Perspectives, over a 3 day period met with Houston investors and businessmen as well as read numerous reports, and this is what GP sees, in February of 2013 for the Houston economy:

1. Hotel operators buying and developing new properties.The Houston Business Journal, Shaina Zucker reported that occupancy levels of many hotels in Houston are now above pre-recession levels.
2. I investors seeking to purchase banks and banks seeking to buy banks (such as Memorial City Bank) are canvassing Houston for acquisitions of financial institutions and they have been looking at several banks according to Allen Gage, Chief Executive.Midwest City Bank generated $12,000,000 in loans and $8,000,000 in deposits in the northwest Houston area in recent months.

Investors from Pakistan, India and Iran meet in Houston

for a wedding party

3. sian and Middle Eastern investors have come to Houston seeking to invest in the Houston and Texas market. Asian and Middle Eastern businessmen are bringing money into Houston to invest in the Houston market. One told me, “My people in Abu Dhabi and Dubai have told me to look for investments in Houston.” Money from Qatar, India, China, Pakistan, is seeking investments in Houston.
4. Hospital owners eager to buy other hospitals are in Houston.

We met with several groups of investors in the medical industry, who said: “Find us the banks, hotels, or hospitals; we can invest from our cash flow up to $20,000,000 down.”

5. nvestors interested in water development are in Houston, these days. We met an international businessman, who told us: “American’s are not as aware as we are, in other nations, of how important and profitable water issues are becoming.”
6. Developers earnestly interested in integrating solar PV and solar water heating into commercial projects have emerged in Houston.Men who formerly were drilling oil wells, are saying, “It is time to take some of our oil profits and get into renewable energy. The natural gas boom is a 20 year gift, at best, and now is the time to get on the renewable energy train.”

Many people think of Houston as an “oil” town, and with oil and natural gas production strong, Houston gets a huge benefit from high prices.But the import export industry centered on the shipping ports also creates an enormous economic machine.

“Expect to see strong economic growth in the Gulf Coast area as the Southeast's population continues to grow and Gulf Coast ports garner favor as attractive alternatives to West Coast ports for bringing goods into the United States," notes Garrett Scott, president of the industrial division for Johnson Development Associates.”

For the past 12 years Gulf Coast ports have benefited from the population growth of the region.The Port of Houston ranks first among U.S. ports in both foreign trade imports (93.8 million tons valued at $61 billion) and total foreign tonnage (152 million tons valued at $114.8 billion).Port Crossing Commerce Center recently opened a 295 acre commercial and industrial business park, which is a prime location between two Port of Houston terminals, and a 900-car rail yard. Most people don’t realize that the Panama Canal expansion ( a $5.2billionproject adding two new sets of locks and widening and deepening existing channels) will make the all water route from Asia and into the U.S. Gulf Coast an attractive option for shippers transporting containerized cargo, allowing them to bypass the West Coast and East Coast portsand avoid congestion and traffic delays by water.

"The Port predicts that its container volume will increase 11 percent a year for the next five years as a result of the larger, more efficient ships coming through the Panama Canal," says Jeff Moseley, president and CEO of the Greater Houston Partnership, a member-based economic development organization.

In the past 90 days, import and export activity is increasing through the Gulf of Mexico shipping lanes. While the nation’s Los Angeles and Long Beach container ports showed downward trends, Houston’s boxed cargo volume was steady to increasing. Economist, Ernst Diener said: "Imports and exports through ports creates more jobs in trucking, rail, aviation and a host of support industries." Houston's air traffic is up, and a quick drive on Houston’s freeways will confirm that trucking traffic is booming.

There is electricity in the air in Houston. But there is electricity in the wind and in the sun as well.Houston is finding that investors are interested not only in oil, but in wind and solar projects. On a recent trip to Dubai, investors told Global Perspectives"We are glad to look at real estate developments, but our real interest is in Wind Energy and Solar Energy projects." Many investors indicated a preference for malls, commercial buildings, and projects powered by solar or wind. One head of aaffluentgroup of doctors and surgeons told us: "Hotels and hospitals can save 25% of their energy cost by use of solar water heating. We are looking for facilities that use renewable energy." They believe it makes economic sense and we were both surprised and delighted to see this attitude emerging in Houston.

Houston has an attitude that is irrepressible. It is that old familiar ‘We can do anything and this is the time and place to do it” that Houstonians are famous the world over for.

We visited Joel Olsteen’s huge Lakewood church, right off of Highway 59 (near the Galleria) and his voice boomed to the 10,000 people in the audience as he said:“2013 is the year of progress and prosperity, go faster and further”.If church growth and contributions are any reflection of an economy, then Houston’s churches report that contribution levels and church growth is up in recent months.

The famous Shriners who control 22 hospitals (providing free medical treatment for children throughout the USA)are finding increased enthusiasm and donors for children’s health issues. We visited a banquet of over 500+ affluent Shriners in Houston and they told us:“For a while contributions were down, but now we are seeing people and companies come through with donations. When Houston’s people feel confident about making money, they give more.”

Saneh T. Boothe, Iranian/American business owner and actress who loves Houston, posed for this photo with Houston’s skyline in the background, saying: “Houston, a toast to you for economic recovery and growth!"

Afsaneh Tabee Boothe, Actress and Houston fan